Fewer Deals at Disney Parks

By Kelli B. Grant

Theme park revenue proved magical for Walt Disney last quarter, a trend experts say will have visitors wishing upon a star to find good deals.

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Disney reported revenues of $9.63 billion — a 6% jump — for the second quarter of its 2012 fiscal year after market close Tuesday. Theme parks represented a bright spot against losses for the widely-panned movie “John Carter.” The Magic Kingdom and its counterparts brought in twice the revenue and earnings of the studio division last year, reports The Wall Street Journal. During the second quarter, they represented a 10% increase in revenue, to $2.9 billion. Executives said they saw strengthening in Disney parks worldwide, with the exception of a decrease at Disneyland Paris due to higher labor costs and lower attendance.

Analysts say the higher theme park revenue stems from both increased attendance and higher prices for purchases such as tickets and hotel room rates. “I view the parks as pent-up demand,” says Michael Corty, an industry analyst covering Disney for Morningstar. Disney discounted steeply during the recession to keep people visiting, he says, but as the economy recovers, more people have the wherewithal to make that trip. That has shifted pricing power back in the company’s favor. “Going to Disney World or Disneyland is still a premium experience,” Corty says.

For travelers, this shift likely means fewer deals. Disney lodging promotions typically offer 20% to 40% off, but offers this year have been on the lower end of that range, says Jenny Alley, director of marketing for Undercover Tourist, which sells discount tickets and lodging in the Orlando area. She says the site has also seen fewer Disney properties included in offers, and a smaller inventory of rooms made available. On the park side, “this is the first time in quite a while where there is not a big nationwide promotion,” says Ricky Brigante, the owner of Disney-focused deal site InsidetheMagic.net. Disney also waited only 10 months between its August 2010 price increase and the one in June 2011, he says. “Ticket prices go up every year like clockwork,” he says. In that latest increase, one-day ticket prices rose 4% to $85, and a seven-day pass increased 8% to $267.

Even if Disney deals are fewer, travelers can still save. As we previously reported, Orlando is one of the cities with big bargains for summer travelers. Vacation-rental sites list three-bedroom properties for as little as $700 a week, and Hotels.com reports that hotel prices dropped 7% last year to an average $146. “There are always discounted tickets available in some form,” Brigante says. Consumers can also save as much as 10% by buying ahead of the usual summer price increases. Some Disney park passes don’t expire, and on those that do, the clock doesn’t start ticking until the pass is used for the first time, he says.